As we established in the last post…the way to find really profitable deals is to establish a marketing campaign to drive motivated sellers to call YOU.
When potentials sellers are contacting you – then YOU have all of the leverage. You are deciding whether or not to pursue the lead. You are deciding if there is enough potential profit in the deal to proceed.
If not – PASS and move on to the next lead.
You are never afraid to pass on a lead because there is always the next one. This is how you make serious money investing in real estate. You pick and choose to only work on really profitable deals.
So how do you market to make that happen?
The first consideration is budget. How much can you afford to spend on a continuous monthly basis?
The first rule of successful marketing is repetition. If your marketing does not reach the same prospect numerous times, then it is wasted.
As a rule of thumb you need to spend $1000 – $1250 a month for every deal for month you want to do. So if your goal is to close 3 deals at $10,000 each you’ll want to spend $3,000 – $4,000 a month to make about $30,000.
Not a bad return, right?
But the problem is you can afford to spend those dollars every month…yet. Most people can’t.
No problem. Simply start with what you can. Obviously the less you spend the longer it takes, but your initial goal is just to find one house deal. Then use the profits from that one to fund more marketing.
The keep repeating until you are at the budget you need.
So getting started you need the biggest bang for the buck. You’ll need to consider two things:
- Which marketing medium will you use?
- Should you market to targeted areas or to targeted lists?
Marketing mediums are the types of marketing methods or channels for broadcasting your message. Examples are: fliers; direct mail; bandit signs; billboards; newspapers; etc.
Targeted areas are geographic areas in which you focus all of your marketing. You might select the area based on the types of houses; condition of homes; price ranges; or demographics.
A targeted list is comprised of homeowners who have some compelling reason to believe that they are more motivated to sell. A list of homeowners facing foreclosure is an example of such a list.
The advantages of targeting a geographic area are that you find the hidden deals that no one knows about because these homeowners are not on a list; your marketing has more impact the longer you market in the same area; all of your leads are focused in one area and you quickly become an expert in the area.
The major advantage of targeted list marketing is that it is more focused on higher potential prospects making your overall marketing campaign less expensive.
There are numerous lists that you can target: pre-foreclosure; bankruptcy; divorce; absentee homeowners; landlords; and inherited properties.
The easier the access to the list – the more competition exists which typically results in smaller profits. I prefer to use lists that I research and create since usually other investors are not willing to do the work. These become the highest profit deals!
In upcoming posts I’ll be talking about a lead source that is absolutely fantastic for finding great deals.
I love real estate investing…don’t you? There are so many ways to make so much money!!!!
Expect abundance,
Lou Castillo
